August 5, 2021
Consolidated Uranium Inc. (TSXV:CUR, BUY, C$3.80 target, David A. Talbot) provided an update on its previously announced, option agreement with IsoEnergy Ltd. (TSXV:ISO, Not Rated) whereby Consolidated can acquire a 100% of the Mountain Lake uranium project located in Nunavut. Upon receipt of shareholder approval making the agreement effective as of August 3rd, 2021, in accordance with the terms of the agreement Consolidated will deliver initial consideration to IsoEnergy consisting of: 1) 900,000 common shares of CUR issued at a price of C$1.99/sh and 2) a cash payment of C$20,000. Consolidated has two years from the effective date to exercise the option and acquire a 100% of Mountain Lake by paying C$1M in either cash or common shares. Following exercise of the option, further contingent payments will be required based on the spot price of uranium (C$415k at US$50/lb, C$615k at US$75/lb or C$820k at US$100/lb). We view the opportunity to acquire the Mountain Lake project a good option for Consolidated, as this early-stage project has high-grade exploration potential; 22 drill historic drill holes identified up to 5.18% U3O8. The company has two years to decide whether it wishes to exercise the option by carrying out exploration work by itself, or perhaps with a JV partner. All eyes are currently on Consolidated’s agreement with Energy Fuels Inc. (TSX:EFR, Not Rated, David A. Talbot) to acquire three permitted and past-producing uranium mines and other projects (read more). Energy Fuels will become a shareholder of Consolidated, will continue to operate the projects for the company and allow material from the acquired assets to be processed at the White Mesa mill for production. We believe this near-term production potential in the US should help unlock value for shareholders and provide a re-rating opportunity for Consolidated. Read more
